More Bankruptcy Claims Traded In November

More U.S. bankruptcy claims were traded last month than the rest of the year, with the Tribune Co. and Tronox Inc. bankruptcies gaining the most active interest, according to reports released earlier this week.

A total of 942 bankruptcy claims were traded last month alone, a sharp rise from the 644 claims traded in October. This puts bankruptcy claims trading at its highest level this year since April.

The value of the claims also rose to its highest in several months, going from $1.8 billion in October to $3.2 billion in November. Values last peaked in July, according to SecondMarket, an online trading portal for bankruptcy claims.

Creditors who have claims on bankrupt businesses can sell off their interests before the case closes. Bankruptcy claims are often bought up by investors in hopes that their values will rise in the months leading up to and following the bankruptcy.

Experts attribute the rise in trading to the spike in Tribune bankruptcy claims, which recently rose 178, more than twice its previous level. Creditors, including the suppliers involved in the case, have said they are unsure when they will get compensated with three different reorganization proposals on hand.

Lehman Brothers, who set bankruptcy records with its 2008 filing, is also one of the most active bankruptcy trading cases. Other sources include Chemutra Corp., AbitibiBowater Inc., and Workflow Management.

After Lehman brothers, the bankruptcy cases with the biggest value of claims were Cabi Downtown, a Florida developer; Motors Liquidation, formerly General Motors; and Tronox, a chemical manufacturer.

 

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